On Feb. 18, 2025, President Trump signed an executive order, “Ensuring Accountability for All Agencies,” which subjects traditionally “independent” agencies to many of the same supervisory measures as typical federal executive agencies. Independent agencies have long been exempted from such supervisory measures based in part on the Supreme Court’s 1935 decision in Humphrey’s Executor v. United States, which upheld statutory for-cause removal protection for commissioners of the Federal Trade Commission.
Unless and until the Supreme Court revisits that precedent — which it may soon have occasion to do given ongoing litigation over the administration’s firings of federal officials — these for-cause removal protections may limit the effectiveness of the supervisory measures. But their extension to independent agencies is significant on its own and represents a substantial change for these agencies.
The executive order applies broadly to every “independent regulatory agency,” as defined in 44 U.S.C. § 3502(5), with just two exceptions: (i) the Federal Open Market Committee, which implements U.S. monetary policy, is wholly exempted, and (ii) the Board of Governors of the Federal Reserve System is exempted “in its conduct of monetary policy,” but not “in connection with its conduct and authorities directly related to its supervision and regulation of financial institutions.” Thus, a broad range of “independent” agencies — including the Commodity Futures Trading Commission, Federal Communications Commission, Federal Energy Regulatory Commission (FERC), Federal Trade Commission (FTC), National Labor Relations Board, Occupational Health and Safety Administration, Securities and Exchange Commission (SEC), and Office of the Comptroller of the Currency — will be subject to five distinct supervisory measures designed to increase accountability to the President, even if the President still does not have a substantive role in the agencies’ decision-making.
1. OIRA Regulatory Review. The regulations these agencies promulgate will now be subject to the regulatory-review process administered by the Office of Information & Regulatory Affairs (OIRA) under Executive Order 12,866 and subsequent orders. This review process has applied to other federal agencies for more than 30 years, building on even earlier supervisory measures, but independent agencies have been exempted until now. In short, this process requires agencies to conduct a “regulatory impact analysis” for significant rulemakings and to submit to an inter-agency review process when proposing or finalizing a significant rule. Interested stakeholders also have the opportunity to meet with OIRA to share their views during the regulatory-review process. While the process itself does not give the President or any other Executive Branch official a substantive role in the rulemaking process, it provides a mechanism for oversight of and influence in an agency’s decision-making.
2. Performance Standards and Management Objectives. Appointees at independent agencies will now be subject to standards and objectives established by the Director of the Office of Management and Budget (OMB), and OMB will report to the President periodically on their performance and efficiency. Even under Humphrey’s Executor and the statutory schemes that insulate appointees from at-will removal, the President may still remove appointees for cause, which often is defined to include “inefficiency” and “neglect of duty.” At a minimum, these performance metrics will provide a soft mechanism for the President to influence the behavior of appointees at independent agencies. It could also lay the groundwork for the President to remove appointees for cause under existing law.
3. Apportionments and OMB Budgetary Oversight. The Director of OMB will now exercise budgetary oversight of independent agencies’ obligations and appropriations, including to assess their consistency with the President’s policies and priorities. The power of the purse represents a strong supervisory measure both for its direct influence on an agency’s activities and for its indirect influence on decision-making by agency leaders who want to maintain control over their agencies’ budgets.
4. White House Consultation. Independent agencies are now directed to appoint a White House liaison and to consult and coordinate with the White House, including the Domestic Policy Council (DPC) and National Economic Council (NEC), on policies and priorities. As with the OIRA regulatory-review process, an independent agency’s participation in the policy-coordination processes run by DPC and NEC does not give the President or any other Executive Branch official a substantive role in the agency’s decision-making, but it provides a significant mechanism for oversight and influence.
5. Consistent Interpretation of Federal Law. Under the order, Executive Branch employees, including lawyers at independent agencies, are now prohibited from advancing a conflicting interpretation of federal law absent express authorization from the President or the Attorney General. The President and the Attorney General generally provide authoritative interpretations of federal law for the Executive Branch, and the Department of Justice (DOJ) generally represents federal agencies in court. Many independent agencies, however, have statutory authority to represent themselves in court—other than before the Supreme Court, where with few exceptions the Solicitor General is statutorily charged with representing the United States. That independent litigating authority sometimes has led to an independent agency taking a position that conflicts with the United States’ position as expressed by DOJ. Such conflicting positions are no longer permitted.
It remains to be seen how much influence these supervisory measures will give the President and his White House staff over the independent agencies and how quickly that influence will be felt. As noted, appointees’ for-cause removal protection currently provides some counterbalance to these measures designed to increase accountability to (and adherence to the positions of) the President and DOJ. But there are multiple cases pending that could bring Humphrey’s Executor back before the Supreme Court. On Feb. 16, the Administration filed a stay application in Bessent v. Dellinger, arising from the firing of the head of the Office of Special Counsel. While the application relies on existing Supreme Court case law and does not ask the Supreme Court to revisit Humphrey’s Executor at this stage, the filing highlights how quickly these cases are moving. Meanwhile, outside of this litigation, the Administration has notified Congress that it will not defend Humphrey’s Executor should that precedent come into question.
For regulated parties, these developments introduce uncertainty but also new opportunities. Parties dealing with the SEC, the FTC, or FERC, for example, can now advocate for their interests through channels previously available only for typical federal executive agencies. For an agency rulemaking, that might entail participation in a stakeholder meeting during the OIRA regulatory review process. For other agency policies, it might involve engagement with DPC or NEC staff. And for litigation matters, it might include advocating for DOJ to side with a particular interpretation of federal law.
As these new supervisory measures are implemented, McGuireWoods will continue to assess how regulated parties can use them most effectively.